Invesco Maintains Swiggy’s Valuation At $5.5 Bn

Atlanta-based investment firm Invesco has maintained the valuation of the Indian foodtech giant Swiggy at $5.5 Bn as of April 30, 2023, according to regulatory filings.

The investment major, who led Swiggy’s $700 Mn funding round in 2021, has cut the foodtech giant’s valuation twice over the past months, down from the $10.7 Bn it commanded during the said funding round.

According to Invesco’s filings, it owns 28,844 shares in Bundl Technologies, the parent company of Swiggy, valuing its stake at $95.46 Mn or $3,309.5 apiece. The filings showed that Invesco bought the stake for $190.5 Mn, valuing the foodtech at $10.7 Bn. This represents a decline of 49.88% from the original valuation.

Incidentally, the valuation markdown from Invesco has brought Swiggy’s valuation below its rival Zomato’s market cap. The recent surge in Zomato’s share price has seen its market cap hit $7.68 Bn as of the stock markets opening on June 27, comfortably above Invesco’s latest valuation for Swiggy.

Invesco is not the only investor in the foodtech giant which has marked its value down in recent months. Baron Capital, another investor in the company, slashed the valuation of Swiggy down to $6.5 Bn as of March 31, 2023.

Recently, Indian startups have seen their investors slash their valuations massively as they reel from adverse macroeconomic conditions. For instance, BlackRock cut BYJU’S valuation by 62% in May.

Further, epharmacy unicorn PharmEasy saw two valuation cuts recently, along with Pine Labs. Vanguard reduced startup Ola’s valuation by 35% to $4.8 Bn in May as well.

In May, Swiggy claimed its food delivery vertical hit profitability as of March 2023. While the foodtech has yet to release its financial statements for FY23, its rival Zomato also claimed that its business, excluding the quick commerce vertical, turned adjusted EBITDA positive in Q4 FY23.

Swiggy has been aggressively slashing its costs to achieve profitability. As part of the cost-cutting measures, it fired 380 employees earlier this year, while it also shut down business verticals which did not find proper product-market fit, including Handpicked.

Earlier this month, a report from the brokerage firm JM Financial noted that Swiggy and Zomato have become ‘indispensable’ for the restaurant industry in India, as eateries in India can attribute nearly a third of their revenue to the food delivery incumbents.

Analysts also don’t see the government’s Open Network for Digital Commerce (ONDC) as a significant near-term threat, further boosting the case for the two foodtech giants.